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Chestnut Hill Hospital’s parent company sued

Community Health Systems, the Franklin, Tenn.-based owner of Chestnut Hill Hospital, is facing Medicare fraud allegations after a bid to take over Tenet Healthcare turned bitter. Tenet recently filed a lawsuit accusing CHS of committing fraud through medically unnecessary admission practice to increase revenue from Medicare and inflate its stock price.

Hagens Berman LLP, a nationwide, investor-rights law firm is looking into the allegations of fraud as well as allegations that Tenet may be misleading federal authorities to drive down CHS’ stock prices, weakening its position to acquire Tenet.

The Philadelphia Inquirer recently reported that the U.S. Department of Health and Human Services, the Securities and Exchange Commission, the Texas Attorney general’s Office and the Justice Department have launched investigations into CHS’ billing practices.

In the lawsuit, Tenet accused CHS of “bilking Medicare of $280 million over three years through excessive hospital admissions.” The allegation is that CHS’ hospitals, which include hospitals in Coatesville, Phoenixville, Jennersville, Pottstown and Salem, N.J., would admit Medicare patients who came in through the emergency room even when it was not medically necessary to do so. One report estimated the increased revenue the hospital received from Medicare to be approximately $7,000 per patient.

CHS is the second largest U.S. hospital company, owning, operating or leasing 130 hospitals in 29 states. The Tenet acquisition would add 49 acute-care hospitals and 84 outpatient centers.

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